THE Alice in Wonderland financial practices of our Government are clearly demonstrated by the proud boast that the Government's wine cellar is now self-supporting on the back of the Foreign Office (FO) buying "high value" items ("Government wine cellar becomes self-funding", The Herald, July 18).
I wonder where the FO got the money to purchase the wine. Our fiat currency is not linked to the value of gold and is only worth what currency speculators are willing to trade some other fiat currency for. It could be that the FO, just like the Bank of England can (as indeed did Rumplestiltskin), manufactures wealth out of nothing.
Alan Ritchie (Letters, July 18) rightly comments that the Bank of England currently holds roughly one quarter of the government bonds that comprise the UK national debt and allows the Government by sleight of hand to avoid paying the interest due on these bonds.
In theory at some point the Government should buy these bonds back and the bank destroy the money, as if that catch-22 situation will ever arise.
If it wanted to, the bank could gradually buy all the UK debt and relieve the UK of the need ever to pay any interest on the bonds and never to repay the initial loan, effectively wiping out the UK national debt. Done quickly this could of course have inflationary pressures and effectively devalue the pound but the nation would be debt-free.
Without crippling interest payments on the current debt the Government would probably not have to borrow from the international financial market. Would this work? Well it already has, as has been demonstrated by the Quantitative Easing exercise that has resulted in the current situation.
David J Crawford,
Flat 3/3,
131 Shuna Street,
Glasgow.
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